Barrick Outlines Proposal To Resolve Dispute Between Acacia, Tanzania
(Kitco News)Â - Barrick Gold Corp. (NYSE: GOLD; TSX: ABX) Wednesday announced a proposal to settle long-running disputes between Acacia Mining Plc. and the government of Tanzania, with the plan including a $300 payment to Tanzania to settle outstanding tax claims.
The proposal also calls for the creation of a local company to manage Acacia’s operations in the African nation, with economic benefits to be shared with Tanzania on a 50-50 basis.
Barrick, which owns 63.9% of the shares in London-listed Acacia, said it acted as a facilitator in arriving at the proposal with Tanzanian officials. The gold-mining giant said it will present this proposal to the independent directors of Acacia in the near future. Barrick added that the proposed framework is consistent with an agreement announced in October 2017.
“Significant amounts of real value have been destroyed by this dispute and, in Barrick`s view, this proposal will allow the business to focus on rebuilding its mining operations in partnership with their respective stakeholders, and most importantly long-suffering investors, including Barrick,” said Mark Bristow, president and chief executive officer of Barrick.
“Work is underway to finalize the definitive agreements needed to give effect to the proposal. To become effective, the proposal and those agreements must be approved by Acacia and the government of Tanzania, in keeping with applicable laws and regulations.”
BMO Capital Markets called the proposal “positive” for Barrick.
“In our view, the impact to Barrick comes in the form of lowering the company's overall risk profile and by future value creation as Acacia resumes full operations at Bulyanhulu, and in reinvesting in its Tanzania portfolio,” BMO said in an early-morning research note.